Criticism is mounting that the home price standard for the "Youth Future Bogeumjari Loan," which the government will launch next year, is out of touch with reality. The government plans to support low-interest loans for young people buying a non-apartment for the first time priced at 400 million won or less, but the average sale price of mid-size officetels suitable for newlyweds to live in Seoul has exceeded 700 million won. Many two-room listings near major business districts such as Magok and Gongdeok are also well over 400 million won, leading to analysis that housing choices could be limited to small units or outskirts.
According to the real estate industry on the 24th, a two-room unit of 64.57㎡ exclusive area at "Magok Central Daebang DMCity" in Magok-dong, Gangseo District, Seoul, was listed for 650 million won. A two-room unit of 56㎡ exclusive area at "Baeksang Propose" in Gongdeok-dong, Mapo District, is asking 410 million won, and a two-room loft-type unit of 42㎡ exclusive area at nearby "Arte Korea Genous" is 590 million won.
A two-room, two-bathroom listing of 76㎡ exclusive area at "Woorim Pil-You" in Mok-dong, Yangcheon District, is 890 million won. An 82㎡ exclusive area unit in the same complex is asking 950 million won, more than double the 400 million won cap on eligible dwelling prices for the Youth Future Bogeumjari Loan.
Actual transaction prices also exceeded 400 million won. A 42.5㎡ exclusive area unit at "Mapo Gongdeok Park Palace II" in Gongdeok-dong traded for 418 million won on the 30th of last month. The same size changed hands for 415 million won in April. A 53.16㎡ exclusive area unit at "Mapo Shinyoung Gwell" sold for 456 million won in January.
The gap with the policy standard widens further when the scope is expanded to all mid-size officetels in Seoul. An analysis of actual transaction price data from the Ministry of Land, Infrastructure and Transport showed that the average sale price of 626 officetel transactions of over 60㎡ to 85㎡ exclusive area in Seoul from the start of the year through the 18th was 751.92 million won. That is about 1.9 times higher than the Youth Future Bogeumjari Loan's dwelling price cap.
For villas, the larger the area, the more transactions exceeded 400 million won. From the start of the year through the 19th, the average sale price of row houses and multi-household dwellings of up to 85㎡ exclusive area traded in Seoul was 409.43 million won. Units of 60㎡ exclusive area or less averaged 385.36 million won, but those over 60㎡ to 85㎡ jumped to 542.01 million won.
The Youth Future Bogeumjari Loan targets young people aged 39 or younger buying their first home in their lifetime. For those with annual earned income of 70 million won or less purchasing residential officetels or villas priced at 400 million won or less and up to 85㎡ exclusive area, the loan-to-value (LTV) ratio applies up to a maximum of 80%. For newlyweds, the income requirement is reviewed based on one spouse. The government plans to supply 3 trillion won annually for two years on a temporary basis starting in January next year.
The Financial Services Commission said the product is intended to provide an additional option to buy a home for one-person households and entry-level workers living on monthly rent in non-apartment housing near subway stations. The stance is to keep support for apartment purchases through the existing Bogeumjari Loan and Didimdol Loan as is.
The Seoul Metropolitan Government conveyed to the government the view that the policy criteria need to be aligned with reality. Seoul Mayor Oh Se-hoon met Minister Kim Yun-duk of the Ministry of Land, Infrastructure and Transport on the 20th and proposed expanding the beneficiaries of the Youth Future Bogeumjari Loan to include apartments and raising the eligible dwelling price standard from 400 million won to 800 million won.
Shim Hyung-seok, senior commissioner at law firm Joyul, said, "Newlyweds need at least two rooms to live, but it is not easy to find listings under 400 million won near Seoul's major business districts," and added, "There is a need to consider separating the eligible dwelling price and the actual loan limit—raising the home price standard while capping the loan limit at a certain level."